SEC accuses Seattle Genetics manager in insider-trading case
Securities regulators Friday accused a manager at Seattle Genetics of leaking clinical trial results to a relative "who made more than ...
Seattle Times business reporter
Securities regulators Friday accused a manager at Seattle Genetics of leaking clinical trial results to a relative "who made more than $800,000 in illegal profits" using the insider information.
The Securities and Exchange Commission (SEC) said Friday it obtained a court order freezing the bank and brokerage accounts that held the trading proceeds.
In a civil suit filed in federal court in Seattle, the commission said Zizhong (James) Fan, 39, manager of clinical programming at Bothell-based Seattle Genetics, told family member Zishen (Brandon) Fan, 38, about confidential positive trial results for the company's flagship drug, a treatment for Hodgkin's lymphoma.
Zishen Fan, who lives in Chino Hills, Calif., spent hundreds of thousands of dollars to buy Seattle Genetics options, as well as common stock, which skyrocketed in value when news of the successful results became public in late September 2010, the commission said in a statement.
He purchased stock and options in the U.S. brokerage account of Junhua Fan, 60, a family member living in China.
According to the SEC, its staff contacted both men Jan. 13. Zishen Fan then attempted to wire several hundred thousand dollars from the U.S. brokerage account to a bank in China, while Zizhong Fan informed his employer Jan. 14 that he was leaving unexpectedly for China and would not return for at least four weeks.
"The facts are more complicated than they appear, and we look forward to providing our side of the story in the near future," Zizhong Fan's attorney, Adam Braun, of Los Angeles, said in a statement.
Zizhong Fan has worked at the company for about 2 ½ years, Braun said. He took a vacation about a week ago. Braun would not say whether Fan is still in the country. He lives in Bothell with his wife and two children.
Seattle Genetics spokeswoman Peggy Pinkston said Zizhong Fan was placed on administrative leave.
"We believe the authorities are focused solely on him and this is an isolated incident," she said. "We're definitely surprised by these allegations and, if proven true, we're shocked and disappointed." The company's 350 employees are trained on complying with its policy against insider trading, she said.
Zishen Fan could not be reached for comment.
Before joining Seattle Genetics, Zizhong Fan worked as a clinical data analyst at MedImmune, a biotechnology firm in Gaithersburg, Md.
Kristi Heim: 206-464-2718 or email@example.com
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